Economic indicators are a series of statistical data which allows a detailed analysis of the performance of the economy , regardless of the time studied in order to obtain a series of preventions about the evolution of the economy.
They consist of statistical data that allow us to know the state of an economy, current or not. The measurement and interpretation of these indicators allows interested parties to identify the risks and opportunities that an economy can offer in some period of its cycle.
- Characteristics of the economic indicators
- What are they for
- What are the main economic indicators
- Economic indicators by country
- Other examples
In the same way that it happens with people, the economy needs a constant examination of their state of health . Ideally, a person goes to a doctor in order to assess how well their blood pressure or glucose levels or temperature are , and all of these are indicators that tell us how good or bad their health is. We can think of the economy in a similar way . Economic indicators are about the information that allows knowing the state of health of an economy, what is its condition at some point in its evolution ( be it past, present or future ).
Characteristics of the economic indicators
How to characterize them? Here are some of its most distinctive elements:
- They have a statistical basis.
- Lets make a study of the economic situation.
- It allows to know the performance of an economy.
- Their focuses are on the past or present data of the business cycle.
- It also allows an estimate of the possible data that would become in the future.
What are they for
Its usefulness lies , basically, in that they allow to have a knowledge of the state of health of an economy at some point in its cycle. It allows to know what are the risks and opportunities that an economy can present at some point in its financial past or the state in which it is currently. And in the same way, it has a predictive utility. Its usefulness lies in the ease of making diagnoses of the state of health of an economy and the actions that can be taken from that point.
From its etymological perspective , the concept comes from a conjugation of words that, in turn, come from Latin and Greek , respectively. Indicator, from its Latin origin, comes from the verb “ indicate” , which can mean “ instrument to see inward ”. Economy, on the other hand, comes from a Greek word whose translation reads: ” the law of the house .” A conjugation of these etymological meanings could say something like: “ instrument to see into the law of the house” .
What are their types? In summary, we could identify three types of economic indicators according to the temporal plane in which they are located ( past, present and future ):
- Lagged economic indicators: these are those whose valuation varies after changes in the economic cycle.
- Leading economic indicators : predictive type indicators , whose value changes before the economic cycle does too.
- Current economic indicators: these are the indicators whose weighting is proportional to the weighting at the current moment of the economy’s evolution.
What are the main economic indicators
Some of the most significant economic indicators for the study of the current economic cycle would be:
- GDP : it is the sum of the values obtained in the market within the economy of a country. It is the profits obtained from the state and distributed among the citizens of the nation in question. These profits are transformed into goods and services.
- Unemployment Rate: it is the index determined by the number of people within a nation who are available to work, and who, however, are unemployed.
- Inflation : consists of the percentage index of increase in the prices of goods and services of that population. Its calculation is usually done through the
The ” Fundamental Analysis” is a tool used to interpret economic indicators. The latter will be based on the study of the authentic value of some financial process , always taking into account the fluctuations that this variable undergoes in the face of the movement of the economic cycle. For this, economic indicators such as GDP and CPI are usually taken .
The importance of economic indicators lies in the optimization of state resources to observe the conditions of the economy of a country, so that the responsible agents can take the necessary measures or precautions . The latter implies economic policies that are much more adjusted to the fiscal reality of the present moment or of the potential future.
Economic indicators by country
Below, several models from different countries are listed that are used to better understand and know the health of an economy , serving these as models that can be achieved through economic or non-economic development:
- Spain : the Iberian country presents, to date, some of the following economic indicators: + 2.5% at the GDP variation level, a CPI of 1.2%, an HDI of 0.893 and an unemployment rate of 14, Four. Five%
- Chile : among the indicators that we can highlight for this nation, we have a variation of GDP of + 3.6%, a CPI of 3%, an HDI of 0.847 and an unemployment rate of 7.1%.
- Colombia : this South American country has a GDP variation of + 2%, a CPI of 2.47%, an HDI of 0.747 and an unemployment rate of 9.7%.
- Mexico : in the case of Colombia, the following indicators can be detected: GDP variation of + 2%, a CPI of 2.47%, an HDI of 0.747 and an unemployment rate of 9.7%.
- Argentina : the Argentine case presents these indicators of its economy: GDP variation of -2.8%, a CPI of 48.5%, an HDI of 0.825 and an unemployment rate of 9.6%.
- Peru: this country presents these indicators: GDP variation of + 3.99%, the CPI is 1.37%, HDI 0.750 and unemployment rate of 6%.
- Brazil: in the Brazilian case, the following data can be identified: GDP variation of + 1.3%, CPI 2.9%, HDI 0.744. And unemployment rate of 12.6%.
- Venezuela: the Venezuelan case shows the following indicators: the variation in GDP is -18%, the CPI is 2688670%, the HDI is 0.767 and the unemployment rate is 34.3%.
Another case where we can note the existence of favorable economic indicators is in the case of China . Its economy, one of the most prosperous in the world, has a nominal GDP of more than 11 million dollars, an unemployment rate of only 3.97%, a CPI of 2% and an HDI of 0.738.